tv The David Rubenstein Show Peer to Peer Conversations PBS January 11, 2020 5:00am-5:31am PST
announcer: support for the pbs presentatation of this program was provided by general motors. man: i see a future. woman: i see a good future. woman: i see a future filled with roads and no rage. both: we see a future... man: with zero crashes. woman: i see a future where fossil fuels... th man: are a thing opast. all: we see a future with zero emissions. man: i see a future where affic... second man: keeps perfect time. third man: where intelligence is always by design. f fourth man: we seeure with zero congestion. woman: zero congestion. man: we are... cond man: we are... both: we are... all: general motors. david rubenstein: do you think that women can run defense companies better than men, or they can run all companies better tn men? marillyn hewsome: i would just say, david, it's a team sport. it isn't all about me. david: donald trump sent out a tweet saying that your biggest product, the f-35, was too expensive. marillyn: i personally engaged, my team engaged
and had a chano have a dialogue withim. david: what's so unique out the f-35? marillyn: it is the most advanced fighter in the world. david: you were recently voted the 22nd mt powerful woman in the entire world. marillyn: i get a note fromsa my brother that , "well, why was oprah higher than you?" or something like that. davi woman: would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave ithis way. all right. i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. hoou define leadership? what is it that makes somebody tick? david: since you've been the ceo,
the market citalization is up hly 280%. anot r company that you compe wi, has a female ceo as well, and their stock is up about 250% since she became-- [applause] the ceo. that's phebe novakovic. doou think that women n run defense companies better than men, or they can run allcompanies be? [laughter and applause] marillyn: i'm just looking at the audience, how many women are out there clappingbut, david-- [cheers and applause] oh! i would just say, david, it's a team sport. it isn't all about me on the performance of our company but i'm really proud about what our team has been able to accomplish over the last 5, 6 years. i'm in my sixth year as ceo, so. david: so wh walk into the shareholders' meetings, do they give you a standing ovation? they must be pretty pp marill had some happy shareholders, yes, but they always, you know, they always keep a bead on us
to make sure that we're constantly creating value, so it's, "what have you done for me lately?" o david: so, u during the transition of the prident of the united states, donald trump sent out a tweet saying that your biggest product, the f-35, was too expensive. and i think you were outf the country at theime? marillyn: i was. i was in israel where we were deli their first two f-35s. david: so what was your reaction to the president of the united states tweeting that you were charging the u.s. govent too much? did you call him or did you have any warning this was coming? marillyn: well, first of all, we needed to get those aircraft delivered. d, you know, one of e most interesting things was that prime minister netanyahu, he was at that event. and he asked me about the fact that our new president was going to get a better price on those aircraft e and, you know, maybeould get a rebate on the ones that we were delivering, so that presented a bit of a challen. but what was important was to recognize
whatresident-elect was communicating. he was trying to communicate to the american pe that he was going to be-- that he was going to get good deals on the equipment he purchased and that he was going to increase defense spending, but he was going to make sure that he spent the taxpayer's dollar wisely, and so inally engaged, my team engaged, and had a chance to have a dialogue with him. rs david: was that the time you ever met him or had you knownim before? marillyn: no, i'd never known him before. but i had an oppor with him. is was before he was president, so this was in december before he came into his role in january. so i went to mar-lago, i went to ump tower. i just started the dialogue, because what's important was for him to-- for us to be able to answer his questions, for him to understand the capabilies that that was gonna bring our men and women in uniform, how important it was, er and then what wedoing to drive the price down. david: so you did give him a little discount? marillyn: we drove the price down, yes. we got the deal done, and we did it in an accelerated fashion. and he definitely had an influence on that.
david: now, since he's been president, defense budgets have gone up, and recently the budget caps have been lift even further. the defense budget's now higher than it's ever been, i think over--when you count everything-- over $700 billion annually. so is this a great time to be a defense company ceo? mari yn: well, let me just puit in p. we're certainly encouraged by the fact that our country is now spending more on defense. but if you just sort of look back o we're playing catch-up in a large way. we certainly want to maintain ouittechnological superi over our adversaries or over the potential adversaries. what it's mean for industry is that we manage through that downturn, like any well-managed company, but we didn't invest at the level that we would have in terms of innovation because we were in a down cycle. now with tcycle, it's time for us to really bring forth the innovations and continue to spend the efforts that we have in line the priorities of our customers.
david: rightly or wrongly, many people in the public say, well, defense contractors are too expensive and they don't have the best image, y might say, in srcles, maybe not in circles you travel in, but some circles, people would say defense compans are not the most popular types of companies. do yr think that's an unfimage? and why do you think that image exists in some parts of the country? marillyn: well, i'll start by saying i think, unfortunately, that image is something that we see for large corporations and larg institutes in genetoday. and itething that we face and have a dialogue around of how do we communicate to the american people what large corporations and what large institutions do. an from a defense contract, what's different for us is that gs are much more transparent. you know, we're no different than another fortune 500 or fortune 100 companyhehat's engaged inctivities, but we're investing in the mmunities where we work and live.
we're spending a lot on philanthropy. wth. i mean, you consider-- you mentioned our $51 billion in sales. you think l out the jobs and that that it does for the economy and what we vest in stem education, so that's important. david: so to bceo of a major defense company-- you're the largest defense contractor the united states government has, right? so do you need a security clearance? and how long does it take to get one of those? [laughter] marillyn: well, you know, 60,000 of our employees have security clearances, so it's a very important element of our business. i personally have to have certain-- that i need to be briefed on, so i have the appropriate clearance associated with that. david: so talk about your background. you grew up in kansas, and your father died when you were 9 years old, and you had 4 siblings. and how did your mother support 5 children? marillyn: well, it was tough, frankly. i mean, my father was with the department of tharmy.
my mother was the at-home mom with 5 children. and it knocked the props out of, you ow, what was a-- we were--we were not-- we were an average family, but its back a lot. i give great credit to my mother who rais 5 children on h own. and she just passed away a couple of years ago at 97, so, i mean, an incredible life that she had. [applause] david: she was from alabama? marillyn: she taught us-- she was from alabama. but she taught us the value of a dollar. we had to learn how to economize at aery young age. she'd send us in to pay the power bill, the electric bill. she just got her kids out and said, "you've got to learn how to do these things because you've got to be"-- it tseght me to be very -reliant, i would say. david: well, i was told that she used to say to you, "go to the g $cery store. here5.00. and bring back $7 of groceries." llyn: yes. that's true. that's very true. learn w to economize. so i learned early how to economize, yes. david: ok. so you went to the university of alabama.
and did you get a scholarship? you didn't have to work? ma: oh, no, i didn't have a scholarship. i worked nights. i worked what was called the graveyard shift, so to speak, from 11:00 at night to 7:00 in the morning, then i went to class from 8:00 to 1:00 or 2:00, and then i'd sleep, unless i had a date, and then i would go right back to work without sleeping because you can do that when you're 18 years old or 19 years old. but worked full-time, paid my own way through school, finished in 3 1/2 years. and, you know, you do what you had to do. ok. so after you graduated, did you say, "i want to be the ceo of lockheed martin"? or what did you say? marillyn: no, i started looking for a job. i took a job as an economist here in washington with the bureau of labor statistics out of college. they were in the midst of redoing the producer price index. it was a good job for a grad student to come in. and so i actually started my career here. 4 years later, you look for the next position, and i interviewed at several companies,
one which was lockheed marietta, georgia, david: so have you ever run into any people from tat bureau of labor tics who, you know, you were working for in those days and now you're the ceo of lockheed martin? have they ever called you for a job or anything since then? marillyn: no, but i do hear from them now and then. you ow, this era of soci media, now and then i'll get an email from somebody or i m tht run into somebody local area that i worked with, that was many years ago. i mean, think about it, i've be, so that was a long time ago. david: but they all say they knew you were going to be successful? they always say that. marillyn: oh, no, no. david: they don'ynsay that? marill: no. david: so when you went to marietta, georgia, you worked your way up. you had, i think, 22 different leadership positions, in you must have been maround a lot. marillyn: i was in marietta for about 13 years. 18 months ins promoted to supervisor of industrial engineering. and at about the two-year mark, i was put on a general management development program. and great credit to a sponsor that-- he put me forward for the program.
so i spent two years rotating around the company. and at the end of the two years, i was manager over all of our production estimating and budgets. david: now, atoint, your husband was unemployed. and he got a job interview with a company. and what company was that? marillynurprised me a bit. his company went out of business, and so he was a t looking for b. we had a 5-month-old baby, so we were very much hoping he'd find a job. and it was a tough labor market at the time. but he came home one day and said, "ok, i got a job." anid, "where?" he said, "at lockheed." and i went, "what?" sorry. i said, "what? why my company?" you know. but it just turned out he went to work in the finance dertment. we didn't really cross paths. i was running indu engineering by that time. but it's interesting. about 5 years--he retired from lockheed after 5 years. en david: so you have gim a lot of credit for what you have been able to achieve. because you might describe-- after he retired, he took on a role that many peoe would say a woman might have normally taken on, or a wife,
and he took on that traditional role. ishat fair to say? tired. our kids were 3 and 6, two boys. we moved from marietta, georgia to fort worth, texas, because my job moved us. and so at the time-- you know how stressful it is have a couple of young children at home. i said, "why don't we try you workinom home for a year?" and we just never changed the model. so he became the at-home dad, he was, you know, the coach, he was the scout leader, he was the--went on the field trips, we were maybe a new-age family back then in the way that we worked, but itd for us, and today our kids are in their twenties, and they're off doing their thing. but when i said he retired, -yhe basically was thatr mark, he got a retirement check from lockheed martin not long ago. so, heh--his 5 years, right. david: so i guess he's happy with the shareholder performance, as well.
marillyn: yes, he is. [laughter] david: now let's talk a moment about the product i mentioned earlier, they're fighter jets. now i've known for a long time there's an f-14, f-15, f-18, there was f-22. and then you come up with something called the f-35. what happened betwee 22 and 35? [laughter] marillyn: well, the fact is that aircrt are not numbered by lockheed martin. the u.s. government determines what the numr is. soand "f" standing for fighter, a "b" for bomber, you know, thf terminology is kindneral, and usually it is sequential. we had--we won the contract with our x-35, which was the experimental you know, you name them with an "x" or "y" if they were experimental or a prototype. so we had named our offering in this competition,
but when they announced the winner, lockheed was the winner, d the secretary of the air force said the f-35, and we were all shocked because we thoughttht was going to bf-23. so once he named it, that's what number it became. david: you didn't want to tell him he made a mistake, i guess, because he just awarded the contract, but... so in the history of our country, this is the biggest defense contract ever, tens of billions of dollars, i assume. why does it cost that much to make these planes? and what i so great about this plane? at is so unique about the f-35? marillyn: the f-35a, which is your conventional variant of the aircraft, was priced at $94.3 million, and we're on a path to drive that down to $80 million by 2020. think about that. you know, think about if you fly-- maybe you fly a gulfstream or something like that, think about what you paid for that-- daviasionally. marillyn: think about the most sophisticated jet fighter
in the world that might cost $80 millio i mean, that's pretty remarkable in my mind. ghit is the most advanced r in the world. so it is basically a force multiplier. it's a fabulous aircraft. i don't have to tell you that. talk to some of the pilots that fly it. david: the sr-71 was avery, it went 6 times the speed of sound, or something like that. marillyn: 3 times, yeah. david: very high. there's a rumor in the defenspress somewhere th're making an sr-72. so can y i tell us right nothat true? marillyn: you know, we are working on hypersonics. and hypersonics would be something over mach 5. we're doing work in that technology, so that's probably all i am going to say about it. davi [applause] all right. ok. let's talk a moment about artificial intelligence.
presumably that's going to be very important for defense contractors, as it is for other companies. marillyn: well, it's a vee' important area that investing in. we think our customers are looking tr solutions to use thhnology. but in artificial intelligence, you can think abt-- we're working on a helicopter that will be unmanned. so that's an opportunity h david: an unmannicopter? marillyn: an unmanned helicopter. we have other unmanned vehicles that we have, but that autonomy and using the artificial intelligence for actually flying the helicopter-- david: what's the price for the unmann ? that a little bit... [laughter] all right, so unmanned helicopter, that sounds pretty novel. marillt even in the cockpit of our aircraft, you know, they're using artifi fal intelligence ing information in such a way that the t pilot doesn't have- the human mind just can't move at the same speed as what you can get through that computing power, and so they can make the right decisions to deal with the situation. and we have such things as collision avoidance. so even on our f-16s, and we'll be putting this on our f-35, we hav technology there through are
that if a pilot doesn't realize that they're about ready to hit the ground, this aircraft will take control and avoi we've already saved 6 pilots' lives with that type of technology. so that's just a few exples of how we apply the artificial intelligence. david: now, one of your other produc is helicopters. you boughtomikorsky helicopter frnited technologies. why did you buy it? and are they making the marine oneenwhich is the press helicopter, and how much does that cost? marillyn: you are into the prices, aren't you, david? [laughter] david: i'm always trying to get-- you know, i'm always negotiating for a good deal. marillyn: i see. ok, all right. well, first of all, yes, we bought sikorsky and have bing business with them for 40 years. so, when the opportunity came up, we took e opportunity to buy the company. great integration in our company. it brings the black hawk helicopter, it brings the ch-53, k helicopter for the marine corps, and, as you mentioned, the marine one. i'm happy to say that that program is on schedule
and on cost in producing that for the president. david: but it sts a loof money to make mari one because you have got to have all kinds of security things in there. so it'n not something you call to any other country, i assume. so you only ke, what is it, 23 of them you're gonnmake or something like that? marillyn: yes, that's right. david: and when are they going to be available? marillyn: well, we'll be-- we're on a path of-- they'll--you know, we have to go through the test flight. ad the first flight and things like that, but it takes time for them to roll out. think it's 2019 or so that they'll... i was going to mentionheo you, it is based on s-92, which is a great commercial helicopter. if you're inte in a helicopter, david, i could suggest one. i mean, i think they're only around, you know, $3llion, $40 million. i mean, i'm sure you can do that. david: maybe we can negotiate. maybe if i can get a good deal. do you get a discount if you buy two or something? [laughter] marillyn: we can do a deal. todavid: what's it like the ceo of our nation's largest defense contractor? t about 70% of your revenue,
i think, from the u.s. government. u know, how much of your time do you havto spend with the u.s. government? how do you spend your time, let's say in a typical week, percentage time? y marillyn: i would somewhere between 60% to 70% of time is with strategy of the business, the customers, and engagement around the world, traveling around the world on the customer side of the business. because it is important in my role to be out meeting with not only our congressional leaders and our government leaders to make sure we're aligned with what their needs are and their priorities, but i travel a lot outside the united states. 30% of our bs is outside the united states with governments around the world. david: you were recently voted the 22nd most powerful woman in the entire esrld, not just busut everything. so when you saw that, did you say, "i should be higher?" or did you say, "that's pretty high?" i mean. and how does it feel to be the 22nd most powerful female on the entire planet of 3.6 billion women?
marillyn: you know, i don't focus that much on it, david. i get a note from my brother that said, "well, why was oprah higher than you?" or something like that. david: o marillyn: but, you know, that's not something i focus-- there's lots of lists. it really comes down to having the privilege of leading tional asset and a company that's doing so of the most important a intere. david: when you started out, were you often the only woman in the room at lockheed? marillyn: i was, yes. david: and so was that intimidating or was it the ki of thing where you said, i can shan them i'm better hem, the men? marillyn: you know, i think it's like any team you come into. you have to establish your credibility, recognizing i wand a different ge, so maybe the first moment i was different in that sense, but after that, on and you're part of the team, it was no longer a factor, for me, at l cst, and through areer. but i'll tellyyou what is realositive is that today 22% of our leaders are women, 24%, 25% of our workforce are women.
so the pipele of women-- it's no longer there's only one woman in the room. we have many women leaders in the room, and we've come a long way on the pipeline. back 35 yeo, there weren't as many women coming out of engineering and other professions toome into the workforce, oust as the case was focustomer. but you look at our customer today, you look at our military services, how many women are involved, how many men and women, but women are in uniform and in leadership positions, it's just a pipeline issue. and we're always working on that pipeline to get more women. david: right. and what you do for relaxation? are you an exercise person, are you a traveler, or sports or whatever? marillyn: i like to play golf. mynd and i like to get out and play some golf as relaxation. i like to travel. i mean, our family gets together and travels. i travel a lot for the job. probably 40%, 50% of my time, i travel on business travel, but one of the things we really enjoy is getting together as a family to trav. i always try to create some fun travel that our kids will find.
as long as mom and dad pays for it and it'sun, they'll come. david: some people say the higher a handicap of a ceo, the better the stock will perform. if it's a low handicap, that means the ceo is spending too much time is playing golf. so- mariyn: you're not going to ask me my handicap, are you, david? david: i assume your-- what your handicap i- david: you're not a scratch golfer, i assume. marillyn: noay. no. no. i don't play enough for that. david: ok. today--it sounds like it must be pretty low. can you beat your husband, or is he better than you? marillyn: no. well, he's better than me, but, you know, i always remind him that there's the average for women and there's the average for men, so as long as i can keep-- david: ok, and if he has a close putt, do you just give it to him or just make him putt it out? [laughter] so today, what is the biggest challenge the s. defense industry has? marillyn: well, the challenge that we have is really thomchallenge our cus have. we have an environment where the threats today
are so difficult around the world, the global security environment is so unpredictable and is changing so rapidly, so you have a need for solutions to address that and to stay ahea of tht and stay ahead of the adversaries. at the same time, we have constrained budget and the budget pressures that we've faced over the last several ars, and maybe we're having to spend money on near-term getting thingsneack up to rea instead of investing in what we need to to address the por competitions that we have out there with our adversaries. so that then in turn is a challenge for industry, because if you haven't been investing along the way, we've got to--you know, we've got move with speed while at the same time driving costs wn. david: what about cyber warfare? that must be an important part of your business now. how do you make certain that our enemies around the world aren't tryinet your secrets? mariyn: i can't-- i mean, they are trying get our secrets. is is a constant threat that a company like ours
and many companies have in the u.s. er countries trying to get at our secrets. sland we take it very seri because we know that we are a target so we've invested a lot in the technologies to protect that, but i think it's a constant. you know, these threats are advanced and they're asymmetric and they're constantly changg. it's really important for us to stay on top of that and keep invesng in it. david: i menoned earlier, since you became the ceo, your stock is up. if i bought some stock morrow, would i also see a very significant gain in 4 years or 5 years? or you think the prices are already soigh for the defense ocks? marillyn: david, i am not going to advise you on stock price today. i think you're really good at that. but r would tell you this, r company, we are always focused on creating shareholder value. so just know that's our commitment, and we're going to drive the company for growth nd and for innovationor shareholder value.
david: well, as long as you're the ceo, i'd probably be happy to but how long might you be the ceo? do you have any plans? if the president of the united states called you and said, "i'd like you to be secretary of defense," , or something like th would you entertain that, or you're gonna stay where you are for a while? marillyn: in our company, mean, i feel very privileged. i love the work that we do, the team of t markable people twork with that, you know, have the highest integrity. they are so dedicated and so talented. i love working at lockheed martin. and i serve e the pleasure of ard of directors, so how long i work will be up to them. but today, i'm really enjoying the work that i'm doing and i have no intention of stepping down from mrole. david: well, whenever you do step down-- at some poin might step down, at some point, 10 years, 15 years, 20 years, would you consider the higher calling of private equity? [laughter] marillyn: well, you know, as i told you, i have a passion for business. i might very well consider that, david. david: well, whenever you do step down, please let me know,
.ll be happy to talk to y thank you very much. marillyn: thank you. announceupport for the pbs presentation of this program was provided by general motors. man: i see a fure. woman: i see a good future. woman: i see a future filled with roads and no rage. ur both: we see a fut.. man: with zero crashes. woman: i see a future where fossil fuels... are a thing of the past. all: we see a future with zero emissions. man: i see future where trafc... second man: keeps perfect time third man: where intelligence is always by design. fourth man: we see a future with zero congestion. woman: zero congestion. man: we are... second man: we are... both: we are... all: general motors. you're watchins. ♪
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